Standing Committee D

[Mr. David Amess in the Chair]

Water Bill [Lords]

Clause 13 - Who may apply for a licence

Norman Baker: I beg to move amendment No. 187, in
clause 13, page 15, leave out lines 31 and 32.
 Good morning, Mr. Amess. I wipe the sleep from my eyes and reflect on the early starts for Committee sittings these days. I hope that we can move to a later start at some point in my parliamentary life. 
 This modest amendment aims simply to clarify the position in the clause. Like Government Back Benchers, we are battle-hardened, and I confidently expect the Minister to tell me why my amendment is inappropriate, does not work or has an unforeseen consequence; I look forward to it. 
 I tabled the amendment because of the criteria that the Environment Agency will apply in judging who may apply for a licence. New subsection (3A) states: 
''The Agency may, in particular, take evidence of a person's occupation of land to be evidence of his right of access to it.''
 Why does the agency not satisfy itself of a right of access, which is a sensible legal test, rather than trying to second guess the situation by examining someone's occupation of land, which could occur through trespass or some other illegal means? If the agency satisfied itself simply on an occupation test, rather than on a right-of-access test, it might end up condoning the improper occupation of land. That may be a theoretical point about an unlikely situation, but the provision seems unnecessary. Will the Minister explain why it exists?

Elliot Morley: Currently, occupation of land qualifies a person to make an application for an abstraction licence. Under clause 13, the availability to make an application is extended to land where there is a right of access. The clause amends section 35 of the Water Resources Act 1991 to establish a right of access to the relevant land as the only qualification necessary for a person to apply for a licence. However, occupation of land will continue to serve as evidence of a right of access. I can tell the hon. Gentleman that people who apply for an abstraction licence on land that is not theirs will have to provide evidence of right of access as part of the application.

Bill Wiggin: The amendment is more interesting than I first realised. Will the Minister confirm whether the wording means that people will be allowed to abstract from common land, to which they automatically have right of access?

Elliot Morley: Commoners have right of access, but on common land there is probably an issue in law about occupation. People would not have sole or exclusive occupation of such land, which means that they could not apply for an abstraction licence.

Bill Wiggin: I thank the Minister for that. Will he clarify the situation with an amendment?

Elliot Morley: I am happy to consider that. I do not know whether the point needs to be clarified in the Bill or in the explanatory notes, so I will check what needs to be done.

Norman Baker: I listened to that brief exchange with interest. It may be because it is early morning, but I am not much wiser at the end of it than I was at the beginning. My query does not seem to have been answered, and notwithstanding the historical precedent, I am unclear why there is any reference to occupation of land; it seems to be irrelevant in determining the right to abstract. However, it would be useful if the Minister wrote a note to all Committee members on that point, and on that basis I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 13 ordered to stand part of the Bill.

Clause 14 - Abolition of combined licences

Question proposed, That the clause stand part of the Bill.

Bill Wiggin: I am curious why the clause is necessary. What is wrong with combining abstraction and impounding licences? Those provisions will cease to have effect, but what useful purpose does the clause serve?

Elliot Morley: It is quite simple. The abstraction element will now be time-limited, and will expire, so there is no sense in issuing combined licences because the abstraction and impounding licences have different time scales.

Bill Wiggin: I am grateful for the Minister's reply, but I am not completely satisfied that that is a good reason. It is a reason, and it makes sense, but it is not necessarily a good one. I do not see the advantage. If the work involved is damaging the environment, it makes sense that abstraction and impounding licences should be coterminous and expire at the same time. Will the Minister explain why they should not be coterminous?

Elliot Morley: The hon. Gentleman is suggesting that the principle of time-limiting abstraction licences should be extended to impounding licences. They have different functions, and different controls apply to them. We do not need to place a time limit on impounding licences. That would only increase bureaucracy for licence holders, who would then have to apply, unnecessarily, for two licences, even though the time limit applies only to abstraction licences. The purpose of the clause is simply to reduce bureaucracy for applicants.

Bill Wiggin: The Minister has gone straight for the jugular this morning. I am allergic to the idea of adding to bureaucracy, and I would be happy to consider withdrawing my amendment. None of us wishes to add to the enormous quantity of red tape that the Government are already introducing in the Bill.

David Amess: Of course, the hon. Gentleman does not have to withdraw anything.
 Question put and agreed to. 
 Clause 14 ordered to stand part of the Bill.

Clause 15 - Applications: types of abstraction licence

Norman Baker: I beg to move amendment No. 188, in
clause 15, page 16, line 6, leave out 'ought to be' and insert 
 'will be considered as if'.

David Amess: With this it will be convenient to discuss the following amendments: No. 189, in
clause 15, page 16, line 8, leave out 'ought to be' and insert 
 'will be considered as if'.
 No. 190, in 
clause 15, page 16, line 11, leave out 'ought to be' and insert 
 'will be considered as if'.
 No. 191, in 
clause 15, page 16, line 14, leave out 'ought to be' and insert 
 'will be considered as if'.

Norman Baker: The discussion arising from the amendments will be brief. My tabling of them may be due to my past existence as an English teacher. I query the possible ambiguity in the Bill caused by the word ''ought'', which, it seems, can express a view of what should happen without necessarily compelling it to happen. I gently suggest to the Minister that our formulation, the words
''will be considered as if'',
 would give a much clearer legal position and be more likely to achieve what the Government want.

Elliot Morley: I understand the hon. Gentleman's point about making text less ambiguous when there is a case for doing so, but I believe that his amendments would make it more ambiguous. The clause enables the agency to require an applicant for one type of abstraction licence to apply instead for another type, or to group several related applications together. It might, for example, be more appropriate for an applicant to have a temporary licence, rather than to spend a lot of money on a time-limited one, so the provision would work to the applicant's advantage.
 The amendments all propose to modify the basis on which the agency may require applicants to apply for different types or groups of licences. Changing the drafting throughout new section 36A(1) to read, 
''will be considered as if''
 rather than ''ought to be'' is to make a distinction without a difference. Those words in the amendment add ambiguity. 
 The key issue is that the agency must be able to decide that an application is not right. If it decides, for proper and relevant reasons, that the application ought to be different, the clause requires the licence to be treated differently. The amendment, however, would not require the agency to decide why an application should be treated differently but simply that it should be so treated. That would miss the crucial test of the agency having to justify why the licence ought to be treated differently. That is the reason for the difference in the language, and I hope that, as a result of that clarification, the hon. Gentleman will withdraw the amendment.

Norman Baker: I thank the Minister for that explanation, and I think that he has a point. His argument that the amendment makes a distinction without a difference and that it is also ambiguous seems slightly contradictory. However, I am happy to accept his explanation, and I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Bill Wiggin: I beg to move amendment No. 30, in
clause 15, page 16, leave out lines 13 to 16.
 The amendment deals with new section 36A(1)(d), which states that 
''any such application as is referred to above ought to be accompanied by an application for revocation of an existing licence to abstract water.''
 The provision is unnecessary, because that is something that the agency might have to decide when dealing with applications for abstraction licences. I understand that those who want to change the type of licence will accompany such applications with a revocation of the existing licence. That may be the key: it may be that one cannot change a licence unless one already has one, in which case the provision is more understandable. However, it seems a little too heavy-handed because it seems almost automatic that one should not be able to change something unless one already has it. I cannot return to a shop and change an item unless I have something to change. The provision seems to be over-egging the pudding a little, and I wonder why it is in the Bill; I feel that it is slightly more drafting than needed. I want to know why people should be able to change a licence if they do not already have one.

Elliot Morley: The hon. Gentleman has touched on the reason for the provision. The amendment would remove the agency's ability to decide that an application for an abstraction licence ought to be accompanied by an application to revoke an existing licence. The agency is most likely to seek an application for a licence simultaneously with the revocation of an existing licence when a permanent licence is to be replaced by a time-limited one—an applicant may find it advantageous to switch over. The agency would ask the licence holder to apply to revoke the current licence so that only one licence was extant for a given abstraction at any one time. Generally speaking, most people would want to revoke one when applying for the other, but the provision makes absolutely clear the procedures that would have to
 be followed. It is a matter of clarification rather than of the provision being unnecessary.

Bill Wiggin: I am grateful to the Minister for that reply, which makes sense. There is one other problem with the wording. An abstractor with a permanent licence might wish to abstract more water, perhaps not for a long period, and would have to apply to the agency. Obviously that would not be an emergency abstraction; we dealt with those earlier. A company that bottles water might have a particularly large order that will run for six months, and it might want to abstract a considerably larger amount of water for that short period. It would therefore give up its permanent licence and put itself in the agency's hands, which might well turn down the company's application when it returned to its original business.
 That is a hypothetical example of the point that I am trying to make: why would anyone want to put their permanent licence in the agency's hands when the Bill contains few safeguards? The agency seems to operate on a first come, first served basis, so the clause will put a business's permanent licence at risk.

Elliot Morley: I repeat: in some cases, there will be advantages to the holder of a permanent licence switching to a time-limited one. Those advantages may be cost-related, or they may relate to the compensation arrangements, which are different for time-limited and permanent licences, as we will see later in our consideration of the Bill.
 In response to the example given by the hon. Gentleman, I can tell the Committee that if someone holds a licence for a certain volume of abstraction, they do not have to apply for a whole new licence, but can seek a variation to the existing one, so the situation that the hon. Gentleman outlined would not arise. 
Mr. Wiggin rose—
Mr. Ian Liddell-Grainger (Bridgwater) rose—

Bill Wiggin: I give way immediately.

Ian Liddell-Grainger: I seek clarification from the Minister, as my hon. Friend has a point. The holder of a licence is totally in the agency's hands if he wants to change that licence. If the agency chooses to delay the application for any reason, such as the investigation of land ownership, the holder could be put in the very difficult position of, say, bottling while having no licence, all because of time constraints, bureaucracy, or whatever. If that did happen, what recourse would the licence holder have? Would they have recourse to the Secretary of State to arbitrate the gap between the granting of licences, or could they appeal to the agency on the grounds that it had caused the delay? Would it not be better for the licence to be coterminous so that it could be revoked without causing a delay?

Elliot Morley: I cannot think of any circumstances in which a delay would occur. Bottling plants, for example, have permanent licences. If they wanted to vary the abstraction, as in the example given by the hon. Member for Leominster (Mr. Wiggin), they could seek a variation, and they would still be able to abstract while they did so. That should not be especially problematic. The agency would, of course,
 want to consider the potential effects of increasing the abstraction. If the licence holder wanted to change to another licence, the existing licence would remain in effect while the application was being considered and until it was determined. As I said, I cannot think of circumstances in which a gap of the sort referred to by the hon. Member for Bridgwater (Mr. Liddell-Grainger) would arise.

Bill Wiggin: The Minister has, once again, clarified matters. The amendment sought to clarify the wording of the clause. I am comfortable with the Minister's explanation, and I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Bill Wiggin: I beg to move amendment No. 31, in
clause 15, page 16, leave out line 26.
 At our last sitting, the Minister was very clear that we should not make ourselves hostages to fortune with the wording in the Bill. The great word that emerged was ''proportionate''. I was not quite sure whether we were being proportionate by allowing the agency to 
''arrive at the decision referred to in paragraph (a), (b), (c) or (d) . . . on the basis of its assessment of any one or more of the following'',
 and then to include ''any other prescribed matter.'' The word ''prescribed'' might well mean prescribed by the Secretary of State, which would probably be acceptable. However, it may not mean that, so again I probe the Minister for a little clarification.

Elliot Morley: The clause enables the agency to require an applicant for one type of abstraction licence to apply for another type instead, as we have been discussing. The amendment would remove the ability of the Secretary of State to prescribe further matters for the agency to take into account. By prescribe, I mean that the matters would be in the regulations set by the Secretary of State. This is an example of the accountability that has to exist in the operation of the agency, which, in the end, is a delivery arm of the Department for Environment, Food and Rural Affairs despite its being a non-departmental public body.
 I always feel a little uncomfortable discussing such provisions. In my time as a Minister, I cannot think of a single instance when the Secretary of State would have wanted to interfere with decisions made by the agency. The provision is for occasions when there might be further matters that the Secretary of State wanted the agency to take into account when making a decision on the variation of licences. It is a safeguard for the democratic accountability between this House, the Secretary of State and the agency as the delivery arm of a Department that is accountable to Members of Parliament.

Bill Wiggin: As I suspected, this provision has a belt, braces and almost a spare pair of trousers. I draw the Minister's attention to the fact that the Secretary of State gets dragged into it all once again in new subsection(4). The interface between the Secretary of State and the agency is well covered throughout the Bill. That is why I suspect that the provision is not really necessary, particularly because, as the Minister says, the agency is a delivery arm of DEFRA. If the
 agency thought that there was a problem in the offing at any stage, it would be able to talk to the Secretary of State and arrange, in less wide-ranging wording, for corrections to be made.
 I suspect that later on we will come across other such wording. I am grateful to the Minister for saying that he is not particularly comfortable about this sort of thing, and that in his experience the Secretary of State has practically never had to intervene. On that basis alone, we do not need the wording and I feel that the Bill would be better without it.

Elliot Morley: I return to the point that the wording is there to cover all eventualities. Loopholes need to be avoided in legislation. There might be a problem in the future which has not been foreseen, and legislation might not allow the Secretary of State, as in this case, to set regulations when it might be felt appropriate to do so. The provision is simply part of the normal checks and balances that give accountability to Parliament, bearing it in mind that the buck stops with the Secretary of State. We need a legal and democratic link in legislation to cover all eventualities. The subsection is a belt-and-braces provision, and I doubt that such measures would ever be used. However, I suspect that if we did not include the provision, we would find that we needed it.

Bill Wiggin: I wonder whether the Minister himself might become Secretary of State. I am tempted to leave the line in, but what clinches it for me is that one day I might be Secretary of State. On that basis more than any other, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Bill Wiggin: I beg to move amendment No. 32, in
clause 15, page 16, line 37, leave out from 'served' to end of line 38 and insert 'within 28 days'.

David Amess: With this it will be convenient to discuss amendment No. 33, in
clause 15, page 16, line 42, leave out from 'period' to 'or' in line 43 and insert 'of 28 days'.

Bill Wiggin: Once again, the amendment is to probe the Government on the time periods within which the agency must operate. In an earlier sitting, we bandied about the period of five days. I have used a 28-day period in the amendment as it seemed to be a more reasonable length of time. When amending Bills, there is always a danger of somehow constraining the process. However, bearing it in mind that the Minister went for my jugular on the subject of increased bureaucracy, I point out to the Committee that the amendment is designed to reduce the agency's ability to prevaricate and to tie it to a helpful time scale.

Elliot Morley: I understand the reasoning behind the amendment. However, it would completely remove the Secretary of State's power to prescribe important procedural details for abstraction licensing appeals. That is not a fall-back position. The Secretary of State's role in appeals is clear, and it is a key aspect of the Bill. The amendment would mean that there was
 no procedure for serving notices. It would remove the Secretary of State's ability to ensure that there are common procedures for appeals which are necessary to produce consistency.
 New section 36A(6)(b) of the Water Resources Act 1991 provides that if the agency serves a notice to the applicant, it will not follow the advertising steps or proceed with the application before the end of the period within which notice of appeal may be served on the Secretary of State.

Andrew Lansley: I am a bit confused. Does new subsection (5) refer to the notice issued by the agency under new subsection (3), the notice issued by the applicant on appeal to the Secretary of State under new subsection (4), or both?

Elliot Morley: I will return to that point in a moment because it would be worth first considering amendment No. 33, which would add a 28-day time limit for the agency to proceed with the application. That is parasitic on amendment No. 32, which would remove the Secretary of State's power to prescribe appeal procedures and time limits on the regulations. The hon. Gentleman asked to whom that applies, and it is the Secretary of State who can prescribe appeal procedures and time limits for the regulations.
 As the hon. Member for Leominster said, the amendment would impose a time limit of 28 days. That limit would be restrictive, because it might produce a mismatch in timing between when an applicant appealed to the Secretary of State and when the agency could proceed with the licence. That might be inappropriate to the time scales of the appeal, the conditions that the Secretary of State would set, and the time at which the agency could proceed with the licence. I hope that that clarifies the point. 
 The hon. Member for South Cambridgeshire (Mr. Lansley) raised a specific point about new subsection (5) on the applicant's notice of appeal. I hope that those explanations are satisfactory.

Bill Wiggin: It would be helpful for the Secretary of State if the applicant had to serve notice within 28 days. I believe that, during the recent storms, the power companies had to be notified of all compensation claims within a month.

Andrew Lansley: On that vexed question, the one-month limit was particularly unhelpful in the storms last October, as many of my constituents found. Happily, we have managed to secure compensation for many of them anyway.
 Does my hon. Friend agree that if an applicant has a right of appeal, it should be exercised relatively quickly rather than being allowed to stretch into the distance? I would not be surprised if the Secretary of State were to choose 28 days when he comes to prescribe the matters.

Bill Wiggin: I am extremely grateful for my hon. Friend's intervention. I have constituents with the same problem and I am more than happy to accept that 28 days may not be the most appropriate period.

Elliot Morley: In all circumstances?

Bill Wiggin: It is perfectly reasonable for the Secretary of State to specify a period. The purpose of the amendment is to obtain clarity about that period. I hope that the Minister will assure us that the point will be taken seriously.

Elliot Morley: I may be able to provide some helpful reassurance to the hon. Gentleman. The period is not set in stone in the Bill, for the reasons that he gave. There may well be circumstances in which 28 days is not appropriate, but I can assure him that it is proposed that the appropriate period set by the Secretary of State will be 28 days.

Bill Wiggin: I am extremely grateful for that reply. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Norman Baker: I beg to move amendment No. 192, in
clause 15, page 17, line 2, leave out from 'Agency' to 'and' in line 3.

David Amess: With this it will be convenient to discuss amendment No. 200, in
clause 23, page 26, line 10, leave out from 'Agency' to 'and' in line 11.

Norman Baker: The amendments relate to the wording in clause 15 that is repeated in clause 23. I raise this matter as one of natural justice. Under the system set out, applicants have the initial choice as to the type of abstraction licence for which they apply. However, the agency may require an applicant to apply for a different type of licence, or for some types together. The applicant has a right of appeal to the Secretary of State against the agency's decision. That is the basis on which the clause is established—so far, so good. The Secretary of State is the impartial person who decides between the two parties and, under new paragraph (a) at the top of page 17, he or she
''may allow or dismiss the appeal, or vary any part of the decision of the Agency''.
 Again, there is no problem with that sensible arrangement. 
 It is the next part of the sentence that worries me: 
''whether the appeal relates to that part of the decision or not''.
 That rather wide power seems to be given to the Secretary of State for no good reason, unless the Minister can justify that. 
 I shall illustrate what I am concerned about. Let us say that someone has a dispute with their landlord over the common right of passage and they appeal to an independent body. That body says, ''We're not really interested in your right of passage. We're going to make a ruling about who is responsible for the roof'', although that is not the subject of the appeal at all. 
 I wonder why the Secretary of State needs that decision-making power. It seems fundamentally unjust that the Secretary of State can rule on something that no one has raised, and that there is no right of appeal against that and no opportunity for any representations to be made by the agency or, indeed, the applicant. That seems to go against the rules of fundamental natural justice, so I should like some explanation from the Minister as to why the power is in the Bill. He keeps going on about all these safeguards and the belt-and-braces powers that the 
 Secretary of State has, but he will accept, in terms of justice, that each one must be considered and justified in its own right. If it has not been justified in its own right, it should not be in the Bill. Simply giving the Secretary of State carte blanche powers on every aspect of the Bill is not the way to approach it.

Elliot Morley: Straight away I can assure the hon. Gentleman that there is no question that any part of a licence could be changed on appeal unless the applicant had had a full opportunity to make representations. That will not be arbitrary. There will be no variation, and bits will not just be dismissed without people being allowed to have their say on that. In addition, the Secretary of State is subject to judicial review in the normal process of any decision making, even on an appeal process such as this.
 The amendments would change the applicant's appeal process, which is provided for in the Bill, and would remove the provision that the Secretary of State may allow or dismiss the appeal, or vary any part of the agency's decision, whether or not the appeal relates to that part of the decision. I understand the hon. Gentleman's argument that checks and balances are needed on both sides. There needs to be an appropriate balance between the power of the Secretary of State, the rights of the applicant and the powers of the agency, but the amendments would throw that balance out. 
 As the hon. Gentleman says, the amendments would narrow the Secretary of State's powers in relation to decisions on appeal. That would limit the Secretary of State's ability effectively to direct the appeals procedure. It would also mean in practice that every appeal would relate to every aspect of every decision. That is bureaucratic and unnecessary, and it would mean—this is important in regard to the checks and balances affecting various interest groups—that abstractors could, if they wanted, rely on technicalities, to the disadvantage of proper water management. They would effectively decide what could be changed. 
 Such a state of affairs cannot be right, because it upsets the balance of the appeals process and the powers and duties of the Secretary of State and the Environment Agency. Although I understand what the hon. Gentleman says on the matter, the balance of responsibility and accountability is right. Narrowing the powers of the Secretary of State would make the appeals process more difficult and shift the balance unfairly towards the applicant.

Norman Baker: I am happy to admit when I have been convinced by an argument, but I am sorry to say that on this occasion I have not been convinced. First, the Minister says that there will be a full opportunity for representations to be made in the event that the Secretary of State decides to vary something that is not part of the appeal. I see nothing in the clause that allows the applicant any say in such a matter. The applicant will have responded to the agency's notice, commented on it and appealed in the appropriate terms; the notice, therefore, is the thing on which the applicant will have had an opportunity to comment.
 There will have been no opportunity to comment on any matter outside that, although the Secretary of State is to be permitted to use his powers on such a matter, by the phrase
''whether the appeal relates to that part of the decision or not''.
 How can the applicant be said to have a right to comment on something that is not part of the decision? It is not logical. 
 To start the roundabout again: if the Minister is saying that the Secretary of State, who wants to comment on or make a decision about something that was not dealt with in the appeal, can invite both the agency and the applicant to make comments on the matter, that is different—I could support that—but that is not set out in the clause. 
 Secondly, the Minister has alluded to judicial review. Of course, that is a backstop that is always available, but it is not a justification for allowing sloppy legislation to be passed. The passing of the Bill without comment from us would be a material fact when a court came to decide whether to uphold a request for judicial review, so that argument is not a legitimate one. 
 Thirdly, I understood the Minister to be arguing that abstractors would be able to rely on technicalities, and that therefore it would be up to the Secretary of State to correct the ineffective notice served by the Environment Agency. If the Environment Agency serves notice correctly, there should be no technicalities for the abstractors to rely on. It is incumbent on the Environment Agency to get the notice right, and it is not for the Secretary of State to act as some sort of back-up sweeper to correct its errors.

Andrew Lansley: Including the words in question would limit recourse to judicial review. If, without those words in the clause, an appeal were made against a decision of the agency, setting out the grounds of appeal, and the Secretary of State introduced an extraneous matter relating to the decision, a case for judicial review might arise. The Secretary of State could be claimed to have acted unreasonably in introducing that further issue. Although the Minister prays judicial review in aid, his objective may be to restrict it.

Norman Baker: I am not sure whether his objective is to restrict it, but the effect of the clause is to restrict it.
 For those three reasons, I am not happy with the Minister's response. I should be happy to listen to him deal with my points if he wishes to, but from what I have heard so far, I think I shall have to press the matter to a vote.

Elliot Morley: Let me try to reassure the hon. Gentleman. He is mistaken about what he expects the Bill to contain in relation to an appeal process. Appeal processes are clearly established. There is nothing unique about an appeal process in the Bill; most legislation has an appeal process. Although the reference is always to an appeal to the Secretary of State, in reality an appeal will be to an inspector, who will deal with it in the proper course of law in the
 appeal courts structure and make a recommendation to the Secretary of State. That is the actual procedure. In practice, there will always be an opportunity to make representations on any of these issues, because apart from the normal guidelines and appeal processes, which this legislation follows, it is also required by the Human Rights Act 1998, to which the Government are signatories and with which all our legislation must comply.

Norman Baker: Will the Minister explain how it is possible to make representations on a decision that the Secretary of State has taken?

Elliot Morley: The Secretary of State would use the powers only if there was an appeal. If she wanted a variation, that would be discussed within the appeal process. The applicant would have the opportunity to make their case about whatever the Secretary of State was concerned about in relation to the variation that she may seek. In addition, there would be some knock-on effects to the hon. Gentleman's suggestion. Licence applications can be complex depending on what they are for. Changing part of a licence could have knock-on consequences for other parts. If those consequences cannot be given effect, the only other choice that the inspector would have would be to refuse the licence completely. I am talking about adding an element of flexibility that assists the applicant in terms of the abstraction licence.

Andrew Lansley: In the previous sitting the Minister used the analogy of planning inspectors for the Secretary of State's decision being made on the advice of an inspector. I confess that I have not had a chance to look this up, but is he saying that if the Committee were to look at the Secretary of State's powers in relation to a planning appeal, we would find a similar provision, allowing the Secretary of State to vary any part of a decision, whether or not it related to the grounds of an appeal?

Elliot Morley: Yes, the hon. Gentleman is correct to use that analogy. The procedures are very similar in law, because that is what they follow. To expand on that, if the Secretary of State wanted to bring about a variation in that way, she could do it either by giving notice to the inquiry or, if for some reason the inquiry had ended, by giving notice in writing. The appellants would have the right to reopen the inquiry if they so chose. If there was a variation from the Secretary of State and the appellants had not had the chance to make their case in an inquiry they would have the right to have the inquiry reopened. The applicant would always have the right to make their case if variation powers were used.

Norman Baker: I am sorry, but I am not convinced by that argument. I hesitate to say this, but I do not think that the analogy of the planning inspector on which the Minister relied is correct. A planning application may be refused for whatever reason—perhaps because the subject of the application would overlook neighbours—and the applicant can appeal to an inspector. The inspector will consider it, but in those circumstances he cannot say, ''Actually, the overlook is no problem but I don't like the design of the eaves, so I'm going to refuse the appeal.'' That is not possible under the planning terms, so I do not
 think that that analogy holds true. What is possible here? We are assuming that appeals will be oral hearings rather than written representations. Will they always be oral hearings?

Elliot Morley: They can be.

Norman Baker: They can be: so they may not be. They may be written representations, in which case there is no possibility that someone can hear what the inspector is thinking.

Elliot Morley: It is the right of the applicant. The applicant can have the proper oral hearing. Just as in a planning appeal, he could make a written submission. The procedures are exactly the same, even to the extent that a planning appeal is in itself effectively a rehearing. A planning application goes through the planning process in local government. That is the first hearing. When it goes to appeal the whole application is reopened. As far as I can see, the procedures for appeals here are identical to planning appeal procedures.

Norman Baker: I hear what the Minister says. As someone who has sat on planning committees for many years and has served as a leader of a district council, which is the planning authority, that is not my understanding of the planning appeal process. We will have to differ on that. One of us will be right and one of us will be wrong. An oral hearing could be chosen and the inspector could say that he wanted to make a ruling on something that is not part of the initial decision. If the parties had an opportunity to make representations, that would be an acceptable legal process. I would not have too many concerns about it. However, that is not guaranteed to happen. A written representation could be made, in which case the inspector could decide on matters extraneous to the decision.

Elliot Morley: But if there was a written representation and the inspector made a decision on something that was not part of the application, the applicant would have the right to reopen the hearing because there had been a change.

Norman Baker: Does the applicant have the right to reopen it? I asked the Minister about that earlier. Is there a formal right for the applicant and the Environment Agency to be consulted and have their views heard if the inspector takes a decision
''whether the appeal relates to that part of the decision or not''?
 The way in which the clause is constructed makes it possible for the inspector to bring in extraneous matters that are not covered by the notice served by the agency and have not been considered by the agency or the applicant. A decision can therefore be taken against which the only recourse is through judicial review. That would appear to be a possible outcome.

Elliot Morley: No, I must make this point clear. The hon. Gentleman is again confused by the fact that legislation like this does not lay out every dot and comma of appeals processes because there are established processes of appeal in law. In law, appellants are given the opportunity and have the absolute right to make representations on every relevant matter. It is not possible to introduce new matters into an appeal and not give the appellant the
 right to comment or make his case. That is not possible under the existing provisions of appeal and the legal provisions that run alongside legislation. They are not generally put in a Bill. That is where the confusion arises.

Norman Baker: In that case, I cannot see the point of the words in the clause. I want to ensure that an inspector cannot introduce extraneous matters that have not been subject to proper deliberation.

Bill Wiggin: We are talking about abstraction licences and the Minister has thrown open the huge amount of opportunity to appeal that may or may not be there, but he has not taken the cost into consideration. If we leave this extra power in the Bill, we effectively prevent many people who may feel injustice is being done from appealing, simply because of the cost.

Norman Baker: The hon. Gentleman makes an important point. Cost is another factor that I had not mentioned but is germane in terms of natural justice. The Secretary of State and I appear to want to have the same process put in place: a process that is fair, and in which there is the opportunity for representations to be made on potential decisions. Our objectives are the same, but the wording does not allow that to happen, or allows it to be overcome by giving the Secretary of State the power to introduce extraneous matters at the decision stage. Where is the right of appeal or representation at the point when the decision is made? Provision for that does not seem to be included. The wording is such that a decision could be made without allowing representations to be made. I am therefore not convinced by what the Minister says, and I do not believe that I will convince him, so I intend to press the matter to a vote.

Elliot Morley: The hon. Gentleman is entitled to press the matter to a vote if he wishes, but he is making rather heavy weather of it. I emphasise again, for the record, that in all cases the applicant will have the right to comment on any sort of variations. The hon. Gentleman will find that in a range of legislation the Secretary of State has the power to intervene—we are back again to the belt-and-braces approach—in issues of national importance, for a relevant reason. If the Secretary of State uses that power to intervene in relation to a variation, the applicant will, in all cases, have the right to comment and make their case.
 Question put, That the amendment be made:—
The Committee divided: Ayes 8, Noes 13.

Question accordingly negatived. 
 Clause 15 ordered to stand part of the Bill.

Clause 16 - Publication of application for licence

Bill Wiggin: I beg to move amendment No. 34, in
clause 16, page 17, line 45, at end insert 
 'of less than 50,000 cubic metres'.
 I return to the word of the day—''proportionality''. The amendment would mean that the powers that be would not be required to publish every single application for a licence to abstract. It is designed to reduce the cost of those licences. 
 I recall the Minister describing those against whom he was legislating as the sort of people who, when damming a stream, take their cement mixer with them. That is a reasonable description, and so I have included 50,000 cu m as the amount. That is probably far too much, but it is a sort of opening bid, so that we can decide exactly how much water must be impeded before it is necessary to go through all the hoops that the clause demands, and the costs that that would incur. It is not a crucial matter, but I did not feel that it was essential to publish in the case of every single dam or misdirection of a stream.

Norman Baker: Just so that I can get an idea of the volume of water, can the hon. Gentleman tell me how many Olympic swimming pools that would be?

Bill Wiggin: I recall the hon. Member for Cardiff, West (Kevin Brennan) having a go at me earlier, when I chose the example of an Olympic swimming pool. The answer to how many swimming pools it would fill is that I do not know; it would depend on the size of the pool.
 The hon. Gentleman's point is whether it is the right amount, which is not the issue. What is important is that we do not publish every dam and the change of direction of every stream, because that would be expensive and unnecessary. The information that people require may be hidden by superfluous publication. That is what the amendment is about. It is possible that 50,000 cu m is too much, or not enough; I am probing the Government to find out why every mortal change is to be published.

Elliot Morley: I can go some way to meet what the hon. Gentleman wants, because there will be regulations for exemptions in relation to advertising. However, I do not agree with the figure of 50,000 cu m, because as we discussed earlier, even small-scale impounding could have severe environmental consequences downstream, so it would be a mistake to have volumetric thresholds.
 However, under new section 37, the Secretary of State will have the power to make regulations giving the agency discretion in respect of whether applications require publication and consultation. We will draw up those regulations and put them out for consultation in the normal way. The regulations will be proportionate: there will be some very minor impounding applications and it may not serve any useful purpose if they have to go through the process 
 and expense of advertising. Although I appreciate the hon. Gentleman's intention in tabling the amendment, it would be a mistake to specify absolute limits, because each application should be considered on its individual merits and its potential consequences.

George Osborne: Will the agency have complete discretion or will the regulations set out certain criteria against which it would have to make a judgment?

Elliot Morley: Yes, the hon. Gentleman is right: it will be the intention of the regulations to lay down the criteria by which discretion will be applied, subject to public consultation on those proposals. The Bill goes some way to meeting what the hon. Member for Leominster seeks.

Hugo Swire: With reference to the point made by my hon. Friend the Member for Leominster, will the guidelines to be drawn up refer to cubic metres, or will they be totally discretionary?

Elliot Morley: That will be subject to consultation. My personal opinion is that a guideline would not be needed, because even a small impounding application could have severe environmental implications. It will depend on what the application is for, what the impounding will do and what the effects could be. In such circumstances, it is not unreasonable that the Environment Agency should have some discretion. Regulations will be drawn up by the Department and put out to public consultation about how the agency will use that discretion, so that people are aware of what is involved.

Ian Liddell-Grainger: Would the Minister consider publishing the regulations sooner rather than later, to dovetail with the measure? People should have the chance to look at those proposals in the light of the Bill—it will take time to go through Parliament—especially in view of his point about downstream environmental damage, which I understand.

Elliot Morley: Regulations and powers often follow after legislation has gone through Parliament; that is quite normal. However, in this case I will discuss the time scale with officials and talk to the hon. Gentleman about it. There is a considerable work load in drafting legislation, and the regulations procedure will come later.

Bill Wiggin: I am grateful to my hon. Friends for taking an interest in the amendment and to the Minister for his replies to them. However, there is something quite sinister about all this. First, I am more than happy to accept the criticism that the volume is wrong, but it is sinister and wrong for the Government not to consult before they legislate. There should not be consultation once the Bill is drafted, written, published and enacted. There should have been consultation beforehand, and it should not be up the Minister to calm my anger in Committee.

Siôn Simon: I was hoping that the hon. Gentleman could clarify something for me. If I remember correctly from Tuesday, you are noting that the Minister—

David Amess: Order. I note nothing. I think that the hon. Gentleman means the hon. Member for Leominster.

Siôn Simon: I do indeed. I am sorry, Mr. Amess. I seem to remember that the hon. Member for Leominster noted that the Minister was good at doing indignation, and I wonder whether he might have been pondering that yesterday.

Bill Wiggin: I am more than grateful to the hon. Gentleman for commenting not only on my indignation but on the superb performance that we had from the Minister, with his righteous indignation, which in the end was actually wrong indignation—or perhaps ''wrong-teous'', if you will forgive me for that, Mr. Amess.

George Osborne: My hon. Friend's indignation is indeed righteous, because the Government have had several years to prepare the legislation. It has been going around the shops for a considerable time, and is not legislation that has been introduced in the recent past, so I urge him to continue probing the Government on the issue. It is not a coincidence that we meet under the picture of the Executive infringing the rights of Parliament.

Bill Wiggin: My hon. Friend is right: the Government may well have to legislate before they can publish their regulations, but they should not legislate before they consult. Although we have been probing the Government on the volume, the time and the various procedures that will be used to ensure that extra costs will not be heaped on small abstractors and small impounders, we want to ensure that the Government know what they are talking about—which they cannot if they have not done their consultation.

Hugo Swire: My hon. Friend is not labouring a point, he is making an extremely good point. Here we are, yet again, considering Government-sponsored legislation that goes into considerable detail, but when we raise a pertinent point, we are told that it will be the subject of consultation during some future period, not even 28 days. We are again being asked to take the matter on trust, which is entirely regrettable. Does my hon. Friend suggest that the Minister return to the Committee, possibly when he has had time to reflect with his civil servants, to give us some details, so that we can progress further on the point?

Bill Wiggin: That is a very good point, but unfortunately that suggestion is quite impossible, because the Government have not done their consultation first. No matter how much the Minister consults his civil servants, helpful though they might be, they will not be able to tell any of us what the future consultation will deliver. Although it is clear that we shall have to take the regulations after the legislation has been completed, we will not know what the consultation will deliver.
 Although I recognise that the amendment is wholly flawed, I do not see how we can do anything—

Hugo Swire: Not wholly.

Bill Wiggin: Well, not wholly flawed, I accept—it is flawed in its details, but the concept behind it is not. I
 therefore think that I need slightly more than just, ''We will consult later,'' from the Minister.

Elliot Morley: There is one major flaw in that great, righteous tirade, in that the Bill was consulted on, including the draft clause, in the run-up to the legislation. If the hon. Gentleman had been so concerned about the issue, he could have made some representations then. My memory may be slipping, but I do not recall any representations on this part of the Bill.
 Moreover, it is a bit difficult to consult on applying regulations on a Bill that has not received legal or parliamentary assent—that is a bit hard, actually. What has happened is a normal part of legislation. Consultation has taken place, and the Bill has been in process for some time. The hon. Gentleman's logic seems to be that as it is so difficult to give the agency some sensible flexibility, we should not do it. That would save all the arguments. 
 There seems to be a lot of bogus indignation. The Bill was published in draft form some time before it started the formal legislative procedure, following a new process of publishing draft Bills for consultation that was introduced by this Government. The draft Bill procedure is not used in every case, but it was used for this Bill, and I am strongly in favour of it. It meant that there was much more consultation on this Bill than is often the case for legislation. We are now talking about small enabling provisions in the main part of the Bill, which has been out for consultation, and regulations will be put in place when the Bill is enacted. That is the normal legislative procedure.

Hugo Swire: It is all very well for the Minister to dismiss the provisions as a small piece of enabling legislation, but he cannot have it both ways. He says that they have already been consulted on, but if so, why does he have no answers? It is no good for him to say that we are coming up with false accusations. My hon. Friend the Member for Leominster suggested a threshold of 50,000 cu m only to tease out an answer, but answer came there none. There may have been consultations, but these provisions have not been properly thought through. We are merely Back Benchers trying yet again to hold an over-mighty Executive to account.

Elliot Morley: I see—this Government, unlike previous Governments, introduce a draft Bill process to allow proper consultation, and that means that the Executive are trying to override proper scrutiny. I cannot go along with that argument.
 There is no comment on the threshold in the clause, because during the consultation process no organisation asked for a threshold. I return to my previous point: the agency needs flexibility. We are happy to consult on this point, but I do not think that a threshold should be set, because the circumstances should be considered on an individual's application.

Siôn Simon: I thought that it might be helpful to explain the real reasons for the apparent indignation of the otherwise cheerfully slouching Conservative Members. They do not understand the numbers
 because they are not expressed in multiples of ordinary people's swimming pools. Having done the calculation myself, I can tell the Opposition that, based on the figures of the hon. Member for Leominster, it is approximately 10 pools.

Elliot Morley: I can see that for some Members, the unit currency of swimming pool multiples is useful for understanding thresholds. It is an interesting concept and could be a new measurement for volumetric assessment.
 I return to the main point. It may be because of the late nights and early mornings, but we are getting into heavy weather on what is a fairly sensible part of the Bill. It provides the flexibility that Opposition Members have previously asked for and for which they are now castigating me.

Bill Wiggin: If ever there was a Minister who deserved castigation, we have him before us, although not necessarily in this context. This is not a new piece of legislation—it is an amendment to section 37 of the Water Resources Act 1991—so it is not fair to say that the draft Bill procedure should have generated the consultation response. People will not necessarily have recognised that the Government were going to change the existing regulations to such an extent.
 As for joking about the size of people's swimming pools, volume is not the point. We needed to know from the Government that they had considered the cost and drawn up guidelines—or even draft guidelines—on what would be published, and the accompanying costs. We merely sought confirmation from the Minister that proper procedures would be put in place and that the consultation that took place on the draft Bill would be properly considered. 
 What triggered my indignation—I am still unhappy about this—was the Minister's dismissal of the amendment on the basis that everything would be taken care of later. We wanted to know that the proper groundwork had been done. I believe that it probably had been, but the Minister missed the opportunity to confirm that. That triggered my indignation and will do so again if it continues.

Elliot Morley: We are going backwards on the point. The general process of legislation is that the principles, which are in the draft Bill, are consulted on, and the details follow later. Other aspects of the Bill will require detailed regulations and guidelines, and there will be consultation on them.
 I should also point out that the clause introduces a new element of deregulation. I am not sure that the hon. Gentleman will want to vote against deregulation, but we shall see.

Bill Wiggin: I accept that 50,000 cu m is an unrealistic amount. We are disappointed not to know what the guideline figures would be or, if they are not designed to be in cubic metres, to have them expressed in another understandable term. However, it is not the right time to have a vote on it, particularly as my next amendment deals with the subject of how
 legislation is constructed, so I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Sue Doughty: I beg to move amendment No.193, in
clause 16, page 18, leave out lines 32 and 33.

David Amess: With this it will be convenient to discuss the following amendments:
 No. 194, in 
clause 16, page 18, line 34, leave out 'exclude' and insert 'include'.
 No. 195, in 
clause 16, page 19, line 10, leave out 
 'to be appropriate to do so' 
 and insert 
 'that there are no persons such as are described in subsections (1) and (2) of section 37 above.'.

Sue Doughty: I have some sympathy with the indignation expressed, because it is less than apparent what the provisions will deliver. On the face of it, they reduce bureaucracy, and we would all like to see that. Reading them through quickly, it would seem a good thing to say, ''If it isn't necessary, don't do it.''
 We want to know why the Government would not want the requirements of subsections (1) and (2) to apply in prescribed cases. Earlier subsections detail those people who should be consulted and how that consultation should take place, but later subsections say that that would not happen in certain circumstances, which the Government will tell us about only in the regulations. The Minister now has an opportunity to give us more information about the circumstances in which the requirements would not apply. 
 On amendment No. 194, subsection (6)(b) appears to reduce bureaucracy, so it would seem that we would support it, but if the regulations relate to notices of application, we would like to know what those notices should include. Later in that subsection, it says that they might 
''exclude prescribed classes of information''.
 The Minister might say that some information is commercially confidential and so will not be published. However, we want to know what sort of information would be excluded and what the basis for that would be. If there is clarity about which classes of information will be excluded, that will give us a much better understanding of the regulations when they are introduced. 
 New section 37A, which amendment No. 195 would change, provides that the Environment Agency or the Secretary of State would not have to publish notices solely on the grounds that it would be ''appropriate'' not to do so . We do not know what that means, what the discretion will cover or whether people who need to know about those matters will be told. Ignorance is no excuse in law, yet it might be if those who had an interest in the matter had been disadvantaged by somebody's saying ''We need not include them; we will not tell them.'' If the abstraction was to take place on land owned by the applicant, would it affect other 
 people? How is one to know what might affect something going on downstream? In the case of chalk courses, there could be an interesting geological situation. We want to know in which circumstances it is appropriate not to supply the information.

Elliot Morley: As the hon. Lady says, the clause shifts responsibility for advertising from the applicant to the agency. There is also a requirement to serve notice on bodies such as water undertakers, navigation or harbour authorities and internal drainage boards. The idea is to ensure that anyone who might be affected by the proposals has the right to make representations, and for their views to be considered by the agency, even if it makes a determination. I do not think that anybody would disagree with that. I believe that as much information as possible should be in the public domain, and we should approach the legislation on that basis.
 The hon. Lady makes the point that restrictions might be justified in some cases. I shall come to those. The clause gives powers to the Secretary of State to make regulations in two sets of circumstances. First, where advertising and giving notice should not take place at all, or where the information that is given needs to be limited, and secondly, where the need to advertise can be made discretionary in the exercise of judgment by the agency or the Secretary of State. That is not controversial—it is an enabling power to take a decision on whether the information should be available. The question is, why might that be necessary? 
 The amendments change the ability to provide for circumstances in which information about given applications should be limited or restricted. The provision could make applications easier by either not requiring or easing advertising details, for example, for renewal of time-limited licences on the same terms. Part of the intention of the clause is to reduce bureaucracy, as the hon. Lady has said. 
 There is a more important reason for the power. Since the Environment Act 1995 was passed, we have not been able to proceed with powers to remove the exemption of Crown sites from the licensing requirements of the Water Resources Act 1991. That is because of the need to give notice and to include details of locations of private water supplies to military bases. For security reasons, it is not desirable to publish details of abstraction licences that serve military bases or other sensitive areas. That is important here, because it is Government policy for all Crown establishments to comply with environmental legislation; we do not want Crown immunity to be used to avoid such legislation. The absolute requirement to publish details of abstraction licences is holding up progress.

Norman Baker: I understand the Minister's argument, which has validity. It is right that as much information as possible should be published, including that relating to land that has had Crown immunity, but equally, we should not endanger national security. Therefore, some classes of water will have to be excluded. However, would he consider inserting a definition of the circumstances under which
 information would be withheld? Perhaps the phrase ''national security'' could be written into the Bill, so that it included a restriction that would apply in circumstances that we could all agree rather than wider powers.

Elliot Morley: National security is a reason with which people are unlikely to disagree. However, there might be other circumstances, and I shall touch on one of them.
 Amendment No. 195 would also limit the flexibility necessary to provide for discretion to be exercised by the agency or the Secretary of State. For instance, when seeking to encourage the trading of abstraction licences in areas of resource scarcity, it could unnecessarily impede progress if a trade that resulted in a benefit to the environment had to be advertised, when there was no positive reason to do so. The amendment would discourage that if there was an element of tradeability, because it would remove the need, in all cases, for people to make further applications for abstraction licences. One element of good water resource management is to be able to use flexibility if it is considered desirable. 
 The amendment would negate that development altogether. As there is always a water undertaker at every point when an application for a licence is submitted, the words proposed would mean that the purpose of the clause would be defeated. I do not think that that is the intention; I understand that the hon. Lady is seeking examples of when restrictions may be imposed. There may be a range of justifications for such restrictions. It may be possible to clarify when they might be used, just to give people an idea, and I would be happy to write to her further to clarify when we would envisage their being used. However, the Government are keen that the maximum amount of information should be put in the public domain, so that, when appropriate, people can see the abstraction figures and the numbers of licences. The powers should be used only in specific cases, and I have outlined one or two examples.

Norman Baker: Let me make a general but pertinent point. I do not wish to be discourteous, but the Minister continually says that the Government wish to put as much information in the public domain as possible. I believe that he is committed to that aim, as is the Secretary of State, but the Bill has to be written in such as way as to apply to all future Governments—of whatever shape, colour or inclination. It is important that legislation holds future Governments to account. It should not allow future Governments to exploit undesirable loopholes in ways that the Minister would not want. Will he consider framing the legislation so that it precludes withholding information for unjustifiable reasons? That is how legislation should be framed.

Elliot Morley: I am entirely sympathetic, but it can be difficult to frame legislation to ensure that there is no abuse while still giving flexibility in circumstances in which information may legitimately be withheld. I assure the hon. Gentleman—I am sure that he will
 accept it—that except in legitimate circumstances, the information should be made public.

Robert Key: I wonder whether the Minister would help the Committee by exploring how far confidentiality should go. For example, does he think that the Ministry of Defence should share information about water abstraction with the Environment Agency?

Elliot Morley: Yes, I do. The Environment Agency will have to make environmental judgments on abstraction and resource management. I realise that national security has to be respected, and we would want to be confident that shared information was being used properly and confidentially. I would have thought that that could be arranged so that legitimate information could be used to enable proper resource management while protecting national security.

Hugo Swire: In those circumstances, the critical point is that it should be incumbent on the Ministry of Defence to decide what information can and cannot be shared. Surely the way round it is for the Bill to say that the information need not be shared for reasons of national security. That would seem to cover everything.

Elliot Morley: As the clause is written, there is the flexibility to do that—the problem is basically covered. I was saying that there would be a range of justifications for restrictions. National security is an obvious example, but there may be other relevant circumstances. I mentioned tradeability and the issues of bureaucracy, time and expense. The details would already be in the public domain and there would be no change to the abstraction figures or the details; there would simply be movement from one person to another. I understand the points that hon. Members are making and I do not think that there is any disagreement. The question is one of making provision in the Bill, where appropriate, for certain cases in which publication might not be needed or desirable.

Robert Key: I should like to help the Minister. I do not think that the matter needs to be dealt with in the Bill, or that we need a new clause. The code of practice on access to Government information contains everything that is necessary. However, the Ministry of Defence, for example, in contractorising the supply of water and sewerage arrangements, would obviously enter into commercially confidential dealings under, for example, Project Aquatrine. I wonder—this is a question of departmental attitudes—to what extent the Ministry of Defence should disclose information about bore holes to water companies, given the refusal to put that in the public domain?

Elliot Morley: Those are difficult issues, and I sympathise with what the hon. Gentleman says. The comments of the hon. Member for Lewes (Norman Baker) about future Governments' attitude to provisions that allow discretion are also relevant. However, there are parliamentary accountability procedures, such as the Select Committee process and parliamentary scrutiny. Ministers can be called before Select Committees to justify their use of such
 powers. I am all for that and think that the Committees' role in holding the Executive to account is important. They are good at it.
 I can tell the hon. Member for Guildford (Sue Doughty) that I am prepared to consider including a reference to national security in the clause. I do not know yet whether that would be appropriate, and I remind her that national security is but one of several considerations, although it is perhaps the most important.

Sue Doughty: We have had an interesting discussion, teasing out certain aspects of the matter. I am grateful for the Minister's commitment to consider the issue of national security and how we might proceed. No doubt we shall hear in due course on Report.
 I fully accept the points about national security and military bases, but the fact remains that abstraction of water can affect others in the vicinity, and within a river basin system. If the information will not be in the public domain for the perfectly practical reasons explained in our debate, how are we to understand what impact the abstraction will have on others?

Elliot Morley: As I said, I do not think that there is any reason for that information not to be shared confidentially with the Environment Agency, in relation to its assessments of water management. I return to the point that the provision is an exception—not the norm. Good reasons for such an exception would be needed: either that no useful purpose would be served, or that national security was at stake. However, the Environment Agency would of course need information for its water resource management and assessments.

Sue Doughty: I think that we have taken that point as far as we can, and received some useful feedback from the Minister. I accept that an exceptional circumstance is envisaged. We look forward to seeing how the regulation will be expressed, as we consider the matter of the exceptions; we accept the reduction of unnecessary bureaucracy while protection is given to those who need protection. I believe that the principle of transparency remains. We want to consider whether the regulation will be future-proof or is open to abuse, and whether there are safeguards.
 I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Bill Wiggin: I beg to move amendment No. 35, in
clause 16, page 19, leave out lines 27 to 31.
 I do not intend to keep members of the Committee long, but I draw their attention to section 66 of the Water Resources Act 1991—''Inland waters owned or managed by British Waterways Board''. The amendment would clarify the wording of the clause, as section 66(2)(a) has been removed. The current wording suggests that paragraphs (b) and (c) are amended, but remain. If paragraph (a) is removed, surely paragraph (b) becomes paragraph (a), and paragraph (c) becomes paragraph (b). If that is the case, the drafting is not right.

Elliot Morley: I did not read the clause that way. The exclusion proposed for the agency when it takes over
 responsibility for advertising applications for abstraction and impounding licences would allow it to serve a copy of the notice on navigation, harbour and conservancy authorities and on drainage boards, except where British Waterways is the applicant. Amendment No. 35 would remove that exclusion. The reason for the exclusion is that, without it, the agency would be serving notice to British Waterways, which would be making the application itself. That would not make sense. I am not clear about the hon. Gentleman's points, but I am clear that the amendment would make no difference to them.

Bill Wiggin: I am happy to accept the Minister's answer that my amendment is unsatisfactory, but its purpose was to determine whether the drafting of the clause was satisfactory. I am sure that the Minister believes that it is, but my point is that the paragraphs are wrongly named. If that is not easy to determine, I am happy to withdraw my amendment if he will confirm to me in writing the drafting procedure for this sort of administration.

Elliot Morley: I can tell the hon. Gentleman now that the drafting is correct.

Bill Wiggin: The Minister is holding the wrong piece of paper. He needs to read the existing legislation. Surely, removing paragraph (a) means that paragraphs (b) and (c) move up the page. The amendment seeks to remove the entire paragraph, which is probably the incorrect way of dealing with the problem, but it should be clear to the Minister that the drafting of the clause is particularly bizarre. Unfortunately for him, we had a very long recess, during which I had time to read all this. The clause struck me as bizarre, which is why I seek clarification.

Elliot Morley: I read the clause myself, but I did not interpret it in the same way. I shall have to examine it in some detail, and I will write to the hon. Gentleman and let him know whether he is right.

Bill Wiggin: I am extremely grateful for the Minister's reply. I sought merely to know how these things should properly be done. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 16 ordered to stand part of the Bill.

Clause 17 - General consideration of licence applications

Bill Wiggin: I beg to move amendment No. 225, in
clause 17, page 20, line 10, at end insert— 
 '(2A) After subsection (2) there is inserted— 
 ''(2A) The Secretary of State shall make a code of practice for the purpose of providing guidance to the Authority in respect of licence applications, including the considerations that should be applied to the renewal and revocation of licences. 
 (2B) Before making the code the Secretary of State must consult with such persons as he considers appropriate including representatives of persons whose business interests are likely to be affected.''.'.

David Amess: With this it will be convenient to discuss the following amendments: No. 226, in
clause 17, page 20, line 15, at end add— 
 '(4) For subsection 3(b) there shall be substituted— 
 ''(b) the reasonable requirements of the applicant, including, in relation to businesses, the existing and planned commitment of resources.''.'.
 No. 227, in 
clause 17, page 20, line 15, at end add— 
 '(5) At the end of subsection (3) there is inserted— 
 ''(c) any code of practice made by the Secretary of State under subsection (2A) of this section.''.'.

Bill Wiggin: I am extremely grateful to the National Farmers Union for its assistance with the amendments and for providing me with briefing material. The intention behind amendment No. 225 is to develop statutory guidelines to the issuing authority in the form of a code of practice. It would also place a duty on the Secretary of State to consult the industry representatives in the production of such a code. I know that the Minister will welcome that.

Andrew Lansley: It may be that I am asking my hon. Friend a question that is properly for the Minister, who may also pick up the point when he replies. When reading my hon. Friend's amendment, I was slightly confused about who ''the Authority'' would be in the circumstances. I looked at the clause and how it would be consolidated into the Water Resources Act 1991 and it reads curiously. It ends up saying ''the Authority'' throughout what would be section 38, whereas in previous clauses we have discussed ''the Agency''. Who is ''the Authority'' in this instance—presumably the Environment Agency? The words ''the Authority'' actually refer to the National Rivers Authority, whose powers have been assumed by the Environment Agency. If that is the case, why, where on each occasion the legislation previously said the National Rivers Authority, have we gone to the trouble of inserting the words ''the Agency''? Clearly it does not mean the Water Services Regulatory Authority, which appears later in the legislation. It does not mean ''the appropriate authority'' as in clause 5(12), which we considered earlier. In this instance, it must mean the Environment Agency, so why not say ''the Agency''?

Bill Wiggin: I am extremely grateful to my hon. Friend for that intervention. As he pointed out, that is one for the Minister. I am not going to adjust the way that ''the Authority'' has been used in the amendments, obviously because it is too late, but also because if the Minister has a sensible reply to that point, I am sure that we will hear it shortly.
 The Environment Agency has issued guidelines on the presumption of renewal for time-limited licences, but many of us remain convinced that a more robust code of practice should be developed to protect the access to water for those agricultural and horticultural businesses whose survival depends on that resource. In the event of an appeal to the Secretary of State by an applicant against a decision of the Environment Agency, it is important that the application and decision-making process are clearly understood and can be shown to have been properly completed. The present description of guidelines does not provide that assurance. 
 The intention of amendment No. 227 is to bring the code of practice into the list of activities laid down under section 38(3) of the Water Resources Act 1991, which must be considered by the authority when making a decision on the grant of a licence. Amendment No. 226 would extend the definition of ''reasonable requirements'' and specifically highlights the present and future plans of a business so that they are considered within the subsection. Crops requiring irrigation in both agriculture and horticultural industries are often those with a high production cost, which is generally rewarded with a high-value product. To retain the quality of production necessary for achieving that high standard, growers need to invest in technologically advanced irrigation equipment. It is essential for any grower to be able to justify such expenditure, and to obtain the best financing possible for his investments. 
 The time-limiting of abstraction licences to the—Environment Agency—proposed period of 12 years reduces the period over which a lender would be willing to extend credit for those projects. Although the agency has made it clear that it will be willing to consider longer licences in certain circumstances, it has said that that will not be a frequent occurrence; it will be in exceptional circumstances only. We now come to the presumption of renewal. I look forward to hearing what the Minister says.

Paddy Tipping: I have some sympathy with the hon. Gentleman's points. Clearly, people who will be affected by changes in the abstraction licence should know where they stand. The hon. Gentleman has prescribed a clear code of practice in the amendments. There is, of course, another approach. Farmers in north Nottinghamshire, for example, extract water from the Bunter sandstone. Over the years this has depleted and there is a problem. Rivers have run dry—Dover beck and Rainworth water, for example—and there is an effect on the environment. As environmentalists and careful land managers, farmers want to avoid that.
 The alternative approach to that which the hon. Gentleman advocated is to ensure that farmers and landowners, as important stakeholders, are involved in the process, which was a point that he made. 
 I have found the Environment Agency to be extremely open on the issue. For example, it is about to hold a big meeting in Nottinghamshire with the farmers involved to discuss the new abstraction process. If that is to succeed, all the stakeholders need to be involved. It is therefore important that the Environment Agency take a positive step at an earlier stage. The Minister said that it needed to be sensitive and realistic, and meetings of the kind that I am outlining will help that approach.

Bill Wiggin: The hon. Gentleman is making an important speech and a vital point. Does he also accept that the Environment Agency of today, which is inclusive and consulting, may consist of a different group of people in 12 years' time, and that the Bill should therefore include something to secure that good behaviour?

Paddy Tipping: I accept that the Environment Agency will be a different group of people, but with the water framework directive, which has occupied the Committee, it will be an even more sensitive group of people, because the changes in water management that we are advocating and moving towards will lead to an open, honest, transparent approach. In that context, everyone says to me that if we understand the scale of the problem—localise it in order to understand what is happening in our environment and landscape—people will be willing to work together. We are talking about relatively long time scales of 12 years. Land managers can do lots of things to reduce water demand. I spoke previously about the work of Tony and Mark Strawson, who won a joint National Farmers Union-Environment Agency conservation award.
 The hon. Gentleman made an important point about investment. High-quality, well-researched and adequate irrigation systems are expensive. During the course of the discussions that must take place between land managers and the Environment Agency in any area, those questions must be considered. 
 There is generally a presumption in favour of going forward. Land managers are in a strong position. The hon. Gentleman makes important points, but the alternative, better approach is to ensure that the Environment Agency is active on the ground and explores the problems with the stakeholders so that they jointly come up with local solutions that meet the local problem.

George Osborne: I want to make a couple of points on the amendment that stem from a visit that I made recently to Hanson Aggregates, which has a quarry in my constituency at Mere Farm. Concerns were expressed to me that I am sure will be familiar to the Minister, since they are those of the Quarry Products Association and the quarrying industry.
 I shall not go into the principal concern of the quarrying industry and other industries, which is the question whether extracting licences should run to the same length as the planning permissions to which they relate, as we can discuss that on other clauses. However, I should like to raise two points. First, will the Minister scotch a rumour that the Environment Agency will renew licences only once, or, as the Quarry Products Association puts it, that it will grant licences only for a maximum of two cycles of the CAMS planning periods of six years? In other words, applicants will get a licence for 12 years only, after which it will be withdrawn or not renewed.

Bill Wiggin: And no compensation.

George Osborne: Indeed. Compensation is an issue that we can discuss later.
 A code of practice could make it clear that the Environment Agency could not have a rule of thumb that it could renew a licence only once. I believe that the Minister has already given assurances to the industry on that matter in private meetings, but it would be useful if he could confirm that in public in the Committee. 
 Secondly, I should like the Minister to comment on a more general concern. The amendment would require the Secretary of State to 
''consult with such persons as he considers appropriate including representatives of persons whose business interests are likely to be affected.''
 That makes the point about the need to balance our obvious concern to protect the environment with other concerns. Environmental protection must always be balanced by consideration of the needs of economic growth. I am concerned that the Environment Agency will consider only one issue—the impact of water abstraction on the water table and on the environment—whereas it should take other considerations into account, such as local employment, and the provision of essential minerals, quarry products, or agricultural products to the wider economy. Environmental judgments should be made in conjunction with economic judgments, and the amendment would require the Secretary of State, in drawing up a code of practice, to consult with other interests and to take into account those other issues.

Elliot Morley: Let me scotch the rumour immediately, as I was invited to do, and make it clear that licences for quarry operators or other groups will be renewed as long as a need can be demonstrated. In determining whether such a need has been demonstrated, the economic points that the hon. Gentleman made will be taken into account. It is made clear in the Bill that the only time that a licence will be withdrawn is when environmental damage is being caused.
 I will also say at this point, although I am sure that we will discuss quarry dewatering later, that nothing in the Bill changes the situation of quarry operators and other operators who hold licences in perpetuity. Their licences will continue in perpetuity. If there is environmental damage, the compensation arrangements will change, but in that case operators can choose to switch to time-limited licences, for which the compensation arrangements are still in place. 
 The effect of the measures has been somewhat overstated, because if a quarry or other business can demonstrate a continuing need, and no environmental damage is being caused, the licences will continue or will be renewed. There is a presumption of renewal. 
 On Second Reading, I said in response to a question from the right hon. Member for Skipton and Ripon (Mr. Curry) that there was 
''a presumption of renewal in the Bill.''—[Official Report, 8 September 2003; Vol. 410, c. 59.]
 I will take this opportunity to make it clear that that is not the case, because I do not want inadvertently to mislead right hon. and hon. Members. The presumption of renewal is implicit in the Bill, subject to the caveats that I mentioned earlier, but is not written into it.

George Osborne: Why does the Minister not want to make that explicit in the Bill? Perhaps he could table an amendment to make it explicit.

Elliot Morley: I would not want to do that, because that would remove the flexibility from water resource management. It is a presumption: the conditions for
 granting and renewing licences are clearly laid down in the Bill and are linked with that presumption. If that presumption were to be included in the Bill, that would have many implications that would limit flexibility in water management. I am sure that there will be more opportunity to discuss that matter later on.
 The agency has the duty to take into account costs and benefits in relation to a licence application, as well as the impact on rural communities. I can reassure the hon. Gentleman on that point. 
 I can also tell the hon. Gentleman that ''authority'' does mean the Environment Agency. The word ''authority'' is an amendment issue; it does not affect the principle of the Bill. 
 I understand the points made by hon. Members. My hon. Friend the Member for Sherwood (Mr. Tipping) made a sensible and reasonable point about the importance of the agency working with local stakeholders; farms, of course, are big stakeholders in water abstraction licences. My hon. Friend has strong connections with farmers in his constituency and he will discuss these matters with them. 
 The arguments for the amendments are not unreasonable. However, amendments Nos. 225 and 227 would require the Secretary of State to draw up a code of practice for the agency, which would have to have regard to it. But we already have the powers under the Environment Act 1995 to issue directions or statutory guidance to the agency should it become necessary to do so. As my hon. Friend said, we have confidence in the agency's ability to develop its own policies for the sustainable management of water resources and to maintain high standards for the operation of the licensing system. Of course, it is important that local views are taken into account and that there is an opportunity for stakeholders to comment on the development of those strategies. 
 The agency document ''Managing Water Abstraction'' already exists and has been developed in consultation with stakeholders. Its draft guidance on time limiting, for example, will be varied in light of comments made during the consideration of the Bill and changes deriving from it. The agency is already going to liaise with interested parties, and DEFRA, too, will be consulted about the draft before the guidance is finalised. Following our discussions during the passage of the Bill, the agency will update ''Managing Water Abstraction'' and consult the relevant stakeholders on it. That will be the involvement for which hon. Members have asked and which I fully support. 
 Amendment No. 226 would amend the test of reasonable requirements which the agency conducts in determining the licence, but that is not necessary. Applicants can provide a business case, including investment and resource implications, when applying for a new licence. If the agency fails to take into account the relevant considerations, including business investment issues, its decision will be open to challenge, and there will be a right of appeal for licences that are turned down.

Hugo Swire: If a licence is revoked, or is the subject of an appeal, would a company be able to operate during the appeal? What is involved in the appeal process and how long will it take?

Elliot Morley: I am sure that the company can continue to operate pending an appeal. The measures in the process apply over long time scales and it is very clear when they come into effect. There will be adequate notice to abstractors in the case of a licence being revoked , which is unlikely to be common. Revocations will be issued only as a last resort, when serious damage is being caused. Even before a licence was revoked the agency would attempt, with the abstractor, to put in place a management plan to deal with the environmental problems, which would not necessarily mean revoking the licence. Revocation would be the end of the procedure; there would be an appeal process, and the operator would continue to use the licence while the appeal was going through.

Ian Liddell-Grainger: The Minister is making some interesting points. A plant in my constituency that produces ammunition extracts a lot of water. Occasionally there have been problems, but it has worked with the agency to deal with them. Can the agency consider matters retrospectively? If it is allowed to take past problems into account there is potential for challenges from organisations and even NGOs and others, which could push back the licence. The Minister says that the revocation would not come into force straight away because the licence would run concurrently with the appeal process, but the agency would still have to listen to the cases of many of the stakeholders in a plant.

Elliot Morley: The test is whether damage is being caused. The agency has a responsibility to act reasonably. That would include taking into account any mitigating measures that had been applied in the past. Its best course of action would be to sit down with the licensee to look at ways that the damage could be mitigated. The abstraction rates could be reduced, or water efficiency measures could be put in place. A range of different things could be done to mitigate the problems of abstraction before taking the final step of revoking the licence.

George Osborne: What the Minister is saying sounds reassuring: the agency would revoke a licence only as a last step; it would first sit down with the company, the farmer or whoever to try to sort things out. One would hope that that would happen, but there is no guarantee. If we inserted into the Bill the Secretary of State's code of practice, which the agency would be required to follow, that would be a fall-back mechanism. We would hope that it would not be necessary, but it would ensure that the agency acted reasonably in those circumstances.

Elliot Morley: I have already stated that the agency has a duty to act reasonably, and it can be challenged. If it has not acted reasonably that will be a factor in any appeal process. I mentioned that it has already produced the document ''Managing Water Abstraction'', which sets out the procedures that it follows. There is not much difference between that and a code of practice, apart from the fact that it has a bit more effect than a code of practice.

Ian Liddell-Grainger: I have a nuclear power station in my constituency, as the Minister knows. If it were challenged, where would that leave the agency? Everything on a nuclear power station is challenged. If it were shut down and told that it could not extract, there would be a fundamental problem. Certain stakeholders do not want to see that sort of plant anywhere in this country, and they will try to cause problems along those lines. The agency rightly has a duty of care, but it also has a duty of responsibility to something as fundamental as a nuclear power station.

Elliot Morley: That is absolutely right. In some circumstances different groups might approach the agency and demand that it take action on an abstraction, but they would have to be able to demonstrate the case for doing so. We are back to the point that the agency must be able to demonstrate that there is an environmental problem, and it must go through that process of trying to find other ways to deal with the problem. Ultimately, if a licence is withdrawn, the licence holder can go to appeal, where all those points will be examined, and if there is no evidence of a need to withdraw, the licence will not be withdrawn.
 Safeguards are in place, but it is a question of evidence; it must be demonstrated that there is a problem. It is fair to say that there have been problems throughout the country. That is why we are introducing the Bill, which gives powers for dealing with those problems. I want to make it clear that dealing with the problem does not necessarily, in all cases, mean revoking the licence.

Norman Baker: The Minister said, in response to an earlier intervention, that an abstraction that was subject to proposed revocation could continue, subject to an appeal being heard. Can he clarify whether that will always be the case, or are there circumstances in which the agency would decide that the abstraction was so damaging to the environment that it would stop it?

Elliot Morley: That would be an extreme case. In the very rare circumstance where severe damage was clearly taking place—particularly on certain sites that have special protection, or where we have international obligations—the agency might seek to stop the abstraction immediately, if there was a case for it to do so. The hon. Gentleman has returned to the point that I made: there must be evidence, and a case for revocation. If there is evidence of extreme damage, the agency can stop the abstraction.

Norman Baker: I do not necessarily disagree with the agency having that power in extreme circumstances, but the Minister will appreciate the potential injustice. If the agency takes action that proves subsequently to be unjustified, someone will have had to stop his or her business activities. Where in the Bill is that power of the agency set out?

Elliot Morley: The powers for an extreme case is not set out in the Bill. The powers already exist because action would take place through an enforcement notice on environmental damage.
 The Bill is about resource management. Good water resource management is good for water users in 
 the same way that it is good for the environment. We have environmental responsibilities, and I am sure that the hon. Gentleman would not want to weaken the Bill so that there is no range of actions that can be taken in extreme cases of severe damage. There are checks and balances in the Bill and in the procedure that we must follow. The code of practice is dealt with in the agency's document, ''Managing Water Abstraction'', and will be updated in light of the Bill. It will involve local stakeholders through consultation, listening to their views and explaining the reasons for choices. That is right and proper.

Bill Wiggin: Why, given that all that will take place, could it not form part of the Bill?

Elliot Morley: We have come back to the way in which legislation is established. We consult on the principles—a new process, I think. Then we legislate on them, and then there is separate consultation on the details of the regulations that implement the Bill. That is a fairly normal practice. The guidance in ''Managing Water Abstraction'' exists now. It will have to be updated, and I would like stakeholders to be involved in consultation on that; the agency will see to that. My hon. Friend the Member for Sherwood has a copy of the document.

Norman Baker: Without wanting to labour my point, I accept that there must be circumstances in which the agency can stop something immediately; that must be right in extreme circumstances. To take the power of planning law as an example, which the Minister is quite keen on this morning, let us imagine that a council issues a stop notice to prevent activity from continuing. Subsequently, that stop notice is challenged and the council is seen to have acted improperly or unjustifiably. The person on whom the notice has been served can claim compensation for loss of business or earnings during the period in which the notice was in force. Can the Minister confirm that if, in a parallel situation, the agency stops abstraction in extreme circumstances, and subsequently that action is successfully challenged, the person on whom the notice was served is equally able to claim compensation for the interruption to his business?

Elliot Morley: I do not claim to be a legal expert, but I imagine that if it was established on appeal that an action by the agency was unreasonable, it would be open to a claim for damages. That legal process applies in every case. I should also make it clear that an enforcement notice can be applied if the abstractor is abstracting outside the terms of its licence. That can be immediate. If it is considered that the damage is being caused within the terms of the licence, the processes outlined in the Bill will apply. I think that I am right in saying that there may not be an immediate shutdown because, as we established earlier, if a notice of revocation is served, that can be appealed, and—

David Amess: Order. I have been rather lax and we have gone wide of the mark. Enforcement notices come under clause 32. I do not wish to be discourteous to the Minister, but we should stick to the amendments.

Elliot Morley: You are right, Mr. Amess. I was responding to questions from members of the Committee, but we have gone away from clause 17 and the amendments, and there will be opportunities to discuss all these issues in due course.
 There is a risk that referring to specific matters in the way proposed in amendment No. 226 would relegate other important considerations, such as environmental matters, to a lower level when dealing with applications. Again, we return to the balance in the Bill, which I think is right. I do not disagree with the principle behind a code of practice, but that is addressed in the agency's own codes of practice, which it produced through ''Managing Water Abstraction'' and which will involve consultation.

Bill Wiggin: I am grateful to the Minister. I am somewhat calmed to know that the powers already exist and that the consultation will be so full and complete that the Government will deliver a proper code of conduct to the Environment Agency. However, he has touched a nerve. The agency has a priority to put the environment before the interests, perhaps, of people. I urge him to keep an eye on that, but in the interests of making progress, and because we may revisit the issue on Report, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 17 ordered to stand part of the Bill.

Clause 18 - Protection from derogation

Question proposed, That the clause stand part of the Bill.

Bill Wiggin: I twitched there, Mr. Amess, and leapt to my feet because I am not sure whether this aspect of the Bill will be very helpful. Could the Minister say a little about the advantage of the protection from derogation?

Elliot Morley: The protection from derogation relates to some of the examples that were given. Mineral water companies or any other existing licence holders have certain priorities. That means that they are protected from derogation of abstraction that would affect their existing licence.

Bill Wiggin: I am most grateful for that reply.

Andrew Lansley: I am slightly surprised that the clause limits the protection from derogation in relation to temporary or transfer licences. I am not quite sure that I understand. Obviously, if those licences are temporary, the requirement for protection will fall away relatively speedily in any case. If a licence has been sought and received from the agency, even if it is temporary and for transfer purposes, why should there not be a protection from derogation in the same way that applied in the past?

Elliot Morley: That is probably where a protected right is a device that operates to protect existing abstractors against later licensed abstractors. The clause identifies where those rights must be considered, for example by the Environment Agency in its determination of an application for an
 abstraction licence—that is a new occasion—or by the Secretary of State for a called-in application on appeal. Such abstractors include those whose licence will no longer be required under our deregulatory process—the time-expired ones that are not being used.
 The clause also allows the agency not to have to consider protected rights when it is reissuing a time-limited licence on the same terms as an expiring one. The rights of others will have been taken into account when any such licence was originally granted. I think that that is the point that has been made. Those rights are not being ignored but have already been taken into account. If the clause was removed—I know that hon. Members are not suggesting that—the agency's obligation to respect those rights when granting new licences would be removed. That would be to the detriment of existing abstractors, whose ability to abstract would be prejudiced. Temporary abstraction licences, as laid out in the Bill, will be only for abstraction of 28 days or less, so they are not likely to have a large impact on the rights of existing abstractors. 
 Abstractions for the purpose of water transfer represent a non-consumptive use of water. Most transfer abstractions will be conducted simply for the purpose of such activities as dewatering in quarries. As such, there is often no significant consequence if there is derogation from such abstractions. The clause recognises that existing licensees have certain rights but there may be some temporary or other circumstances in which a licence can be granted that will not impact on them. That is all that the clause tries to do. 
 Question put and agreed to. 
 Clause 18 ordered to stand part of the Bill.

Clause 19 - Protected rights

Bill Wiggin: I beg to move amendment No. 38, in
clause 19, page 22, line 32, leave out 'four' and insert 'six'.

David Amess: With this it will be convenient to discuss the following amendments:
 No. 119, in 
clause 103, page 128, line 40, leave out 'four' and insert 'six'.
 No. 120, in 
clause 103, page 128, line 43, leave out 'four' and insert 'six'.

Bill Wiggin: Protected rights are an area where the Government have made a significant change to the current situation, effectively by taking away protected rights and ensuring that all people who had licences to abstract in perpetuity now have a time limit on that, albeit one of 12 years—it may be for longer, but will be with any kind of certainty for only 12 years. The change is intended to address the problem of people who have a licence but do not use it.
 I feel that the wording in the Bill is inadequate, because the period of reference—the time limit—in new subsection (8)(a) is four years. I have sought in 
 amendment No. 38 to make it six years. Hon. Members might wonder why I have chosen six years; it is because it fits in with CAMS, the catchment abstraction management strategies, which are the new way of assessing abstraction. Particularly with the Government's intention to license genetically modified crops, crop rotation will become an even longer and more important cycle. A four-year period does not even take into consideration the weather, which I think generally operates on a seven-year cycle. Because CAMS has a six-year period, I felt that we should have a six-year period in the Bill to tie in with that.

Elliot Morley: I understand the hon. Gentleman's points about time limiting and his logic about the six-year period. This is another arbitrary decision on a time scale. He will know that some organisations want a shorter period, while others want a longer one. However, we think that the four-year period reflects the needs of the situation better.

Bill Wiggin: I know that the Minister has many notes in front of him, and he may not have found the one that tells him why he chose four years, but I hoped that he would justify the four-year period. Unfortunately, he has not done that.

Norman Baker: This is an important matter for farmers in particular, and the hon. Gentleman put a convincing case for why the period should be six years. If I understood it correctly, the Minister's response was simply that a variety of representations were made and that he chose something in the middle. Is that also the hon. Gentleman's understanding?

Bill Wiggin: I am reminded of the little boy who stuck his finger in the dyke, except that this time the Minister stuck his finger in the air and guessed a number. Unfortunately, four years is not the right period. Considering the weather cycles, seven years should be the right period. The Government chose a six-year period for CAMS, so I moved in their direction in proposing six years, when the amendment should probably have been for seven years. I am disappointed that the Minister has not got a better excuse for choosing four years, and if he does not come up with one, we should vote on it.

Elliot Morley: I remind the hon. Gentleman that the Bill is about sustainable water management. With that in mind, we need to strike a balance in the effective use of water. If people are holding an abstraction licence but not using it, they are preventing other potential abstractors from acquiring a licence. There are legitimate reasons why people hold on to licences, but four years is a considerable time, and if a licence is not used within it, it is not unreasonable to revoke the licence. It is a question of trying to reflect the needs of proper water resource management and recognising that there may be legitimate reasons why people have not used a licence during a certain time scale. Four years is a reasonable balance.

Norman Baker: Let me help the Minister by putting this question: he said that four years is a reasonable time scale, which is a catch-all answer, but why did he choose four years and not three or five? What is the magic with four?

Elliot Morley: The current period is seven years, as hon. Members know. We think that seven years is too long—

Robert Key: Why?

Elliot Morley: Because, as I mentioned, someone who is not using an abstraction licence may be stopping other people who have a legitimate need for one. It is a question of ensuring the proper use and management of water. Other people may be applying for licences while someone is sitting on one, and seven years is far too long a time for that to happen. The proposed four-year period strikes a balance between the needs of an abstractor, which we recognise, and the needs of licence applicants. A protected right is not same as a licensed abstraction, and the period relates to an abstraction that does not take place. Furthermore, the four years can be extended by the agency.

Hugo Swire: Will the presumption be that the licence will be extended after the four years, which is what the Minister said earlier? At the end of a four-year licence, will the presumption be that it will be extended automatically, even if it has never been used?

Elliot Morley: I am not sure that ''presumption'' is the right word, although it would be fair to say that there is a presumption of renewal. The four-year period can be extended by the agency. If the licence holder has a legitimate case for wanting a longer period, the agency has a responsibility to listen. It should consider the business case, the issue of need and all other relevant matters. Four years is an acceptable period, bearing in mind that it can be extended if an individual licence holder can make a case for that.

Sue Doughty: Earlier, the Minister referred to the fact that one might be able to trade licences—somebody might not be using a licence and others might want it. Would not the provisions take care of that point, so we could allow a longer time for the licence?

Elliot Morley: I should point out that that relates only to unlicensed abstractions, not to licensed ones. That is why there is the four-year period. A protected right is a device that protects existing abstractors against later licensed abstractors, which is what I mentioned. The agency is required to ensure when granting new abstraction licences that holders of protected rights can continue to abstract within the terms of those protected rights. We have to strike a balance, and four years—which can be extended if the circumstances allow—is the right balance.

Andrew Lansley: The point about the agency being able to extend licences is covered by subsection (9)(b), which does not say ''under any circumstances'', but under circumstances in which abstractions authorised under the old licence were
''planned to be carried out at intervals of more than four years''.
 That is a subtle text. It makes it difficult if abstractions were originally planned to be carried out not at intervals of more than four years but more frequently or continuously, but a change occurred to a business or its circumstances. By the way in which the subsection is worded, the agency would be 
 constrained from taking the change of circumstances as meaning that the original licence planned for the abstractions to take place at intervals of more than four years. It is not as easy as the Minister implies for the agency to extend the period before the protected right is lost.

Elliot Morley: The power is there, but it has to be justified. The criteria to which the hon. Gentleman refers have to exist. Although there are qualifications in the text, the right is there. If he wants clarification, I shall be happy to write to him.

Simon Thomas: What appeared initially to be a rather arcane amendment has teased out an interesting line of thought—or lack of it—from the Government. The hon. Member for Leominster advanced several cases as to why the period should be six years. I am not sure about the weather, but if he is, he should be in a different job and making money out of seven-year predictions.
 In terms of planning for changes that might be required in advance of the introduction of GM crops and for different periods of crop rotation, there is an argument for six years. The Minister seems to be saying that six years is unreasonable, and that it should be four years, but we have heard no evidence as to why it should be four years. We have not even heard evidence that the seven-year period was an obstacle to water conservation. If the Minister can tell us why it has been a problem, perhaps we will be able to decide that six years is too close to seven, so four is right. Not having heard the arguments, I tend to think that there is nothing against six years, so we should try to protect the licence holders in the way that has been suggested.

Elliot Morley: We are talking about the right to abstract and where it is not being exercised. In the Bill, that right lapses after four years or any such period as is agreed by the Environment Agency, which was a point that has been made. That is to prevent unused abstraction rights from blocking access to water resources through the prevention of new licence issues.
 In reality, that period should be as low as possible in terms of water resource management. If people are not using their rights, other people may want to apply for abstraction licences, and it is not right and proper for them to be excluded in those circumstances. We of course recognise that there may well be a case for keeping licences that are not being used. Also, the loss of a protected right does not stop abstraction taking place. The unlicensed abstraction can continue lawfully, but the status of the abstraction may change. 
 The amendments would change the period after which a protected right could lapse from four to six years. We believe that the proposed, normal four-year period is right. That goes back to the issue of balance. The period should be limited to as short a time as possible, for good reasons. There may be good reasons to have a six-year period in relation to a protected right, although seven years is too long, and six years does not make a very big difference, because it is reducing the period by only one year. To give the agency effective powers, four years is the most appropriate figure, and that is why it is in the Bill.

Norman Baker: We are still struggling, or at least I am. Will the Minister explain why he has concluded with his officials that the present seven-year period should be reduced to a four-year period? What problems have arisen?

Elliot Morley: The main problem is that the Bill is about water resource management. People might want to abstract, yet others might have protected rights but not be using them, thereby stopping that abstraction, and in some cases that may put increased pressure on other abstractors. If there is not a requirement, other abstractors should be considered. However, the question is how long that protected right should be given. The period is currently seven years, but the proposal is for it to be four years, which is better in respect of the balance between the needs of the abstractor and those of people who are coming in.

Hugo Swire: I am not sure that we are enlightened by that argument. There is nothing new in what we are discussing, but will the Minister, with all his experience in such matters, say how many examples there have been of people being denied licences for abstraction because others have been holding on to licences but not using them? Is that a problem that his Department has encountered? If so, will he say how many examples of it have been encountered in any given year and whether that was a material reason for arriving at his rather strange conclusion?

Elliot Morley: I do not have those figures to hand, but I am sure that I can try to find them for the hon. Gentleman. They may even appear in the course of
 this discussion—and, by amazing coincidence, they have just come to me. The actual figure is none. However, before the hon. Gentleman interrupts to claim that that illustrates his case, seven years may well be precisely a time scale that makes things difficult in relation to taking the relevant action.
 To return to my point, I know that the argument is about seven, six or four. However, my own preference is to give maximum powers in relation to managing water use efficiently and effectively, while trying to take into account the legitimate needs of users. The choice that we have is either the existing seven years, which the agency, with its experience, thinks is too long, as do I, the six years proposed by the hon. Member for Leominster, which is very different from seven years, or four years, which I would prefer, as it would give maximum powers for resource management to the Environment Agency and reflect the rights and reasons of people applying now. It is a question of balance and choice. Having taken into account all the various arguments, I believe that four years is the most appropriate time scale.

Andrew Lansley: If I recall correctly, the Minister referred to the phrase ''or any other period,'' implying that the agency could simply—
 It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Two o'clock.